Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The net profits of Nepal’s commercial banks have declined by 4.6% in the current fiscal year’s first half, while national-level development banks have reported a 15% increase in earnings, reflecting contrasting financial performances across the banking sector.
According to the latest financial data, eight national-level development banks collectively earned NPR 2.58 billion in net profit during the first six months of the fiscal year. This marks a significant rise from the NPR 2.25 billion recorded during the same period last year. However, not all banks shared in this growth. Shine Resunga Development Bank and Lumbini Development Bank experienced a decline in their profits, while the other six banks reported substantial gains.
Garima Development Bank emerged as the top performer, earning the highest net profit of NPR 549.2 million during the six-month period. Jyoti Development Bank posted the fastest growth, with its profit soaring by an impressive 147% compared to the previous fiscal year. In contrast, Lumbini Development Bank recorded the steepest decline, with profits dropping by 30%.
Earnings per share (EPS) metrics also highlighted Garima Development Bank as a standout performer, leading the sector with an annual EPS of NPR 19.34. Kamana Sewa Bank followed closely with an EPS of NPR 18.37, while Muktinath Development Bank recorded NPR 14.28. Other banks also performed solidly, with Mahalaxmi Development Bank at NPR 13.78, Shine Resunga Development Bank at NPR 13.57, Shangri-la Development Bank at NPR 11.46, Jyoti Development Bank at NPR 11.38, and Lumbini Development Bank at NPR 8.15.
The contrasting financial outcomes between commercial and development banks reflect differing operational strategies and market conditions. Analysts attribute the decline in commercial banks’ profits to tighter provisioning requirements enforced by Nepal Rastra Bank, which has pressured their bottom lines. Development banks, on the other hand, have benefited from focused lending strategies and improved operational efficiencies.
The banking sector’s mixed performance has sparked discussions about the broader economic challenges and opportunities in Nepal. While development banks continue to show resilience and adaptability, commercial banks face mounting pressure to navigate regulatory changes and evolving market dynamics. The coming months will likely reveal whether these trends persist or shift as the fiscal year progresses.
Your email address will not be published. Required fields are marked *
Comment *
Name *
Email *
Website
Save my name, email, and website in this browser for the next time I comment.
